The emergence of a health insurance system in a developing country: the case of South Korea

Abstract

In an attempt to understand the social forces and the economic and political conditions under which new social policies emerge in developing countries, this study outlines factors affecting the introduction of the health insurance system in South Korea. The emergence of the South Korean health insurance system was influenced by changing labor needs of the industrial sector, increasing social expectations, external and international pressures, increasing medical costs, and class conflict. These pressures compelled the South Korean government to respond to demands for the introduction of new social welfare policies in the 1970s. In the case of South Korea, the new health insurance system resulted from the government's attempts to cope with political, economic, and social pressures rather than from an ideological commitment to the well-being of the population. The resulting insurance system was a way to maintain the social order and legitimacy of the regime, and a means to promote the health of groups important to defense or production.

PIP: The emergence of the South Korean health insurance system was influenced by changing labor needs of the industrial sector, increasing social expectations, external and international pressures, increasing medical costs, and class conflict. These pressures compelled the South Korean government to respond to demands for the introduction of new social welfare policies in the 1970s. Legislation providing health insurance was 1st introduced in Korea in the 1960s. In 1962 the Ministry of Health and Social Affairs formed a special committee on social security, the first of its kind in Korea, which in the next few years played a major role in investigating the feasibility of health insurance and conducted other preparatory activities. In 1963 the health insurance system drafted by the committee was enacted by the legislature as the Social Security Act, which included medical insurance and workmen's accident compensation insurance. The Social Security Act of 1963, however, did not propose compulsory medical insurance. It was not until 1977, the year after the amended law was passed, that the Korean government implemented a compulsory medical insurance. It resulted from the government's attempts to cope with political, economic, and social pressures rather than from an ideological commitment to the well-being of the population. The resulting insurance system was a way to maintain the social order and legitimacy of the regime, and a means to promote the health of groups important to defense or production. An additional point is that with recent progress in medicine, access to medical care was no longer a problem only for the poor.